Good morning, ladies and gentlemen, and thank you for standing by, and welcome to the VolitionRx Limited’s Fourth Quarter and Full Fiscal Year 2016 Earnings Conference Call. During today’s presentation, all parties will be in a listen-only mode. Following the presentation, the conference call will be opened for questions. [Operator Instructions] This conference is being recorded today, Friday, March 10, 2017. I’d like to turn the conference call over to Mr. Scott Powell, Executive Vice President of Volition Limited. Please go ahead, sir.

Thank you, and welcome everyone to today’s earnings conference call for VolitionRx Limited. This call will cover Volition’s financial and operating results for the fourth quarter and full fiscal year ended December 31, 2016, along with a discussion of our key upcoming 2017 milestones. Following our prepared remarks, we will open up the conference call to a question-and-answer session. Also on our call today are Mr. Cameron Reynolds, Chief Executive Officer; and Mr. David Kratochvil, Chief Financial Officer of Volition. Before we begin our formal remarks, I’d like to remind everyone that some of the statements on this conference call may be considered forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended that concern matters that involve risks and uncertainties that could cause actual results to differ materially from those anticipated or projected in the forward-looking statements. Words such as expects, anticipates, intends, plans, aims, targets, believes, seeks, estimates, optimizing, potential, goal, suggests, and similar expressions identified forward-looking statements. These forward-looking statements relate to the effectiveness of the company’s bodily-fluid-based diagnostic tests, results and completion of clinical studies as well as the company’s ability to develop and successfully commercialize such test platforms for early detection of cancer. The company’s actual results may differ materially from those indicated in these forward-looking statements due to numerous risks and uncertainties. For instance, if we fail to develop and commercialize diagnostic products, we may be unable to execute our plan of operations. Other risks and uncertainties include the company’s failure to obtain necessary regulatory clearances or approvals to distribute and market future products in the clinical IVD market; a failure by the marketplace to accept the products in the company’s development pipeline or any other…

Thank you, Scott, and thank you everyone for joining Volition’s fourth quarter and full fiscal year 2016 earnings conference call. I’d like to thank you all for taking an interest in Volition at this pivotal time for us. I’m delighted with the considerable progress we made in 2016 in so many important areas. It really is incredibly amount of work a small dedicated team can accomplish. Starting with our strong and growing team, which is key to our continued success, we added several key highlights to our business starting in last January, with the appointment of Dr. Jason Terrell as our full-time Chief Medical Officer and Head of U.S. Operations. Having previously served in a part-time capacity with us, Dr. Terrell gives us perspective as a U.S. medical doctor, as well as the capability to plan our U.S. clinical work. Louise Day also joined our team in April as our Chief Marketing and Communications Officer. Ms. Day is responsible for the rebranding of the company and your website, et cetera, and of course, the marketing of our products. In June, we expanded the Board of Volition with the appointment of Dr. Ed Futcher, giving further depth to our independent directors, particularly with regards to the audit compensation and nominations and government’s committees. In November, we strengthened our leadership team further with the appointment of Dr. Philippe Willemsen as Chief Operating Officer of a wholly-owned subsidiary in Belgium. He has extensive experience in the biopharmaceutical environment and he’s certainly will placed as we ramp up our activities and launch our first product. I personally could not be happier nor more proud of our team we put together. We have an extremely talented and experienced team that is dedicated and committed to changing the way cancer is diagnosed. We’re also in the…

Thank you. We will now be conducting a question-and-answer session. [Operator Instructions] Our first question comes from the line of Bruce Jackson with Lake Street Capital Markets. Please proceed with your question.

Hi, everyone, congratulations on all the progress last quarter.

Thank you, Bruce. Yes, it was very encouraging.

So if we could talk about the progress in Denmark and what is going to happen going forward, so what are the checkpoints in terms of getting to a – the first order? You’ve got the logistic studies going right now. What happens after those are completed and when are those could be completed?

Yes, very good question. So the clinical data we feel is done. We have 8,000 patients in the FIT-positive trial. So none of it work currently is – of a clinical nature, it is purely logistics. So obviously, this test has been run by us. These logistic studies to really show how it’s run in a real life situation on real life patients of a few hundred patients in the first phase and then up to 500. So the output from that report goes straight to the screening committee. And we’re very hopeful that they’ll make a decision to then implemented in Denmark. The first phase is in three centers in Denmark and the second is in five centers. And then typically, if they do and we’re very hopeful that they do, they would roll it out nationally as part of the screening program, which we would expect then would be an order in the tens of thousands of kids per year for the national screening program, because they have a very, very immediate problems right now. And if you look at the center, which is in central region, Dr. Leonard Hansen is running that program, and he’s on the steering committee. And Dr. Morten Rasmussen who was quoted in the press release is the central region of Denmark for the steering committee. So we’re certainly working with the right people to get this putting this up in the national screening program and we’re very hopeful.

Okay, great. And then real quick in the 10-K, there were a note of a material weakness in the internal controls section. Can you just give us a little bit more color on what’s going on with that. Have you identified the – what needs to be done? Have you put those fixes in place? And what’s the road to getting all of that resolved?

Yes, absolutely. I’ll give you a quick answer, then David can add as a CFO if anything else. We’re very aware of all of that. We’re a small company and are growing very fast. We take all of our financial requirements very, very seriously, and we’re putting in more and more controls all the time. And we anticipate having to comply with Sarbanes-Oxley this year. So we have a huge amount of work around financial controls and the process going on, and that’s something we talk extremely seriously. But this is typical. I believe of a small company that’s in a few places. But we are very, very careful and we’re in the process now of fixing all those compliance issues and as well as getting ready to comply with Sarbanes-Oxley. David, any – anything else?

No, just to reiterate that basically that disclosure notice is, because we are not currently Sarbanes-Oxley compliance, but we are making every effort to be Sarbanes-Oxley compliance as soon as possible and expect to be by the end of the year, and as when that disclosures come off at that point.

And just – I just fill up on that. We’ve also added several members to our team in many ways beyond the ones I mentioned. We’ve also added on a full-time IT person to help with our controls there, and also a part-time HR person to make sure the controls around whistleblowing and a range of other areas very much taken care of. And we’re going to be taking on a part-time SOX controller, as well as engaging some companies to help us with that. So it’s something, which we’re very mindful of, but something, which is typical for a company our side. And I think will it fixed in a very large part over those in the coming quarters.

Okay, good. Last question, on the presentation of the results from the studies in Denmark, this has been a long road and we’ve been like anxiously awaiting the presentation of the results. Do you have the presentation schedule yet can tell us, which meeting it’s going to be presented at?

Yes, I can. The full 8,000 FIT-positives for the Triage Tests will be presented at DDW in Chicago, and that will be all 8,000, the final numbers for the clinical data set of this population. And the outcome of the Triage studies are presented directly to the screening committee in Denmark. So the DDW Conference in Chicago, I believe, is in May. But that data is just about – the assays have been finished being run, we’re just waiting for the last of the patient data, so that’s just about finished. These are much more for the marketing of the products. The numbers we have currently 2,000 and 4,000, all the positives are very specifically valid, but we’ll announcing all 8,000 data at that time. And if you notice, we have the first set with the trial set, and the second set was a validation set. So we passed both of those. So we’re very confident of those numbers. But we’ll be announcing the full 8,000 at DDW in Chicago. That’s a very big conference. We wanted to make sure, it was a bigger – as big as conference as we could possibly get for that.

All right. Thank you for taking my questions. I’ll hop back in queue.

Thank you, Bruce.

Thank you. Our next question comes from the line of Yi Chen with H.C. Wainwright & Co. Please proceed with your question.

Hi, thank you for taking my questions. First question, do you have to wait for the logistical study results before launch the test in other European countries?

Very good question, Yi. Basically, these will be run in the labs in Denmark, and a lot of other things are similar to other countries, but a few things are different. I think any country has a slightly different healthcare system, so they have slightly different logistical questions as to pertaining to where. For example, France, if we were to get a country like France, you’re talking 200,000 or 300,000 tests per year, but it’s much more centralized than Denmark. So that one or two centers that run a lot of the French capacity would have to have a slightly higher capacity machine run through them. Now, our platforms,, we can perform manually. We can perform on a small machine, or we can perform on a large machine. So it’s all very much within capabilities. So the question, I guess, is in several parts. A lot of what we’re looking for in the Danish side will be applicable to other countries. And but each country, I think, would want some sort of small logistical study to answer the very local questions. But if you think about it in holistically in the scheme of things signing up tens or hundreds of thousands of tests, which would occur year-on-year, if you have to do a small logistical study, that’s a lot better than hiring hundreds of salespeople for millions of dollars, which other companies have had to do. I think if we do end up signing up Denmark, which again, we’re very hopeful for and other countries in Europe in the short to medium-term. We’ve done that with a couple of salespeople. And our current system run on a very simple platform. The margin, I won’t disclose exactly, but it’s very high. So we have a very high margin product with next…

Thank you. Second question, I don’t know you – on your income statement, you currently do not have any sales and marketing expenses. Do you expect to incur any expenses in that category within 2017? And can you give us any color on the amount – potential amount in 2017?

Yes. So what we have currently, Louise Day, who is heading our Communications and Marketing efforts, along with Gaetan who’s our Chief Executive in Belgium, that means spearheading those efforts in the European countries. And I think so far you would have to say, they’ve had a very good success in getting it down the fairway. So currently, that – the expenses we have in – for those people and that’s what we mentioned earlier that it would be the five countries we’re targeting. And those five countries are the ones, which we have been actively targeting picking them up one by one. So no, I don’t expect any other beyond that traveling back and forth. It’s very different from the U.S. You’re not going doctor by doctor, you’re not going insurance company by insurance company. The – and the reason we’re very attracted to this market is the healthcare systems. The screening systems are quite often separate from the actual. They’re all public, so it’s government, but separate. But part of the system is separate. So you need to convince a few key opinion leaders that this is a good product and something they need to buy. So there’s no point having a massive sales forces zero point having a dozen people flying around they’re just bumping into each other. You need to convince some very key people, very smart, very educated, very knowledgeable people. So you have to have a good product, which we’re very comfortable with very good value products, otherwise they won’t buy it. But this is always needed. So and if I do decide to do it, they’ll be buying tens or hundreds of thousands of kits, which is – as a massive outcome for a company. If you look at some of our competitors,…

Okay. Thank you very much.

Thank you, Yi.

Thank you. Our next question comes from the line of Brian Marckx with Zacks Investment Research. Please proceed with your question.

Good morning, Cameron, and congratulations on the results.

Thank you, Brian.

Relative to the time and logistics study, is there some sort of, I guess, existing guideline or other benchmarks that you’re measured against to help determine whether you’re quote unquote successful?

Yes. So this – the clinical data, which The Danish Group we’ve done it with them, so they’re as aware of the data as we are if not more so that we’ve lined it to us. So we believe that’s been ticked off. So that these trials have nothing to do with that, it’s all about the logistics. So the logistics basically come down to can it fit into the current pathway in Denmark, which currently, as I mentioned in the opening statements, that it comes down to FIT test, and then if you’re positive, you then have a colonoscopy. So basically, the criteria basically are the people who run the screening program. Do they think this would actually add to the national screening program. And I know several things absolutely factual. I know the FIT tests in Denmark, the whole FIT test program is having severe problems, because although the FIT test does pick up a lot of cancers, it mixes a lot, but also it provides a huge stress of colonoscopies on the system. They’ve just not the capacity to handle the current screening program at full capacity. They’ll be about 40,000 FIT-positives per year in Denmark, and having trouble with the capacity now 20,000 before they go into the full program in January of next year. So the criteria basically comes down to will it help the screening program meet this demand. And if you see from our data, we’ve cut down the colonoscopies by 25% was keeping very high sensitivity, which we think is a fantastic result. And if you look at the quote from Dr. Rasmussen who the central region of Denmark, they’re also impressed with the results and they’re very keen for this product. So we’re very hopeful. We’ll see how it all pans…

Cameron, on the second phase, which relates to the time to assess how long it takes, is there a specific number, I guess, or a benchmark that you have to meet that you’re – that you have in mind, or is it, I guess, more abstract for lack of a better word?

I don’t think theirs is any specific targets. It comes down to just actually, I think, I look at it in this way sort of a dry run. People give their bloods out to the FIT results, and just a notification, all those things. It’s not actually any specific targets, or criteria, which would make it fail. The assays work very well. They definitely can be run in the labs. But if you actually bring yourself in a position of Dr. Hansen and Dr. Rasmussen, they just want to make sure on a few hundred patients that it goes smoothly. There are also people who are very caring and dedicated, say, patients, they just want to make sure, they would never use these tests in public – on the public in actual – in the pathway before. So they just want to say that all goes smoothly. So, it’s not a matter of actually missing or hitting criteria, it’s more just the whole process works smoothly, because it’s analyzed, or it takes one day to process, it’s not an issue with the timing being more or less or anything like that. It’s just – it’s never been run in patients in a country before. So they just want to see that it goes smoothly before they commit to doing any national program. So there’s always things can go wrong, I just – but it’s not set criteria missed by 1% and something doesn’t happen, it’s just the purely logistics of getting it done.

Okay, okay and have – I assume that other new diagnostics that have come to market through those national screening programs have gone through something similar, is that correct?

Yes, typically absolutely. Any country that has a national screening program that wants to do something will go through a process where they work through the actual very practical logistics of getting it implemented because each country is little different. As I mentioned to one of the questions, I think we gave before, ultimately this hasn’t been done before in any country, so they wanted to see the actual specifics. If it was something very routine that’s done like a, if you look at the blood test for cholesterol for example, it’s been done before in a lot of different ways. You wouldn’t need to do logistics study, but this is something which is helping with their current pathway in the screening programs. So they just want to see it fits into their pathway before they look at the national rollout, so yes, that’s something which is very routine.

Okay and just one on timelines if you would. So the – both of the first and second – the first and second phase of this time and logistics study should be done within about six months. And then what is kind of after that? So then you get kind of a yes or no I guess and in a certain timeframe? And if you can kind of talk about what your expectations are in terms of when you think you’ll hear back?

Yes, absolutely. So it goes from national screening committee, the next round for the national screening program starts in January. If we were, I would be hopeful to be added to that, which would mean that I have to make the orders this year. Obviously it starts in January, I have to get the whole thing bought and setup. I’ve been asked before, we are not 100% certain with that order, three months worth or six months worth of the time, but in any situation we’d be expecting tens of thousands of kits per year. If it’s done per the whole national screening program, it will be in the 20,000 to 40,000 kits per year range. And if it was added to the program in January, which is what we’d be hopeful of, then that have to place the orders this year sometime in Q4. So, it’s all coming on us pretty quickly, so that was what we’d expect timing wise.

So, is that a reasonable timeline you think between – so it starts, say, beginning of March and so that puts you ahead…

Started, yes.

I’m sorry.

Yes, it has started, yes.

It has started, okay so then that would put you at, say, the end of August I think. And so between August or the beginning of September and the end of the year, you would – is that a reasonable timeframe to hear back that yes, you are going to be accepted into the program?

Yes, that’s what we’d expect.

Okay, okay, great. All right, great, thanks Cameron.

Thank you.

Thank you. [Operator Instructions] There are no further questions at this time. I would like to turn the call back over to Mr. Reynolds for closing remarks.

Thank you everyone who is joining us today for the VolitionRx Limited’s fourth quarter and full fiscal year 2016 earnings conference call. We really appreciate your interest in Volition and look forward to speaking to you with again in the near future. And just as a quick reminder, we also have some interviews that will be on our website from proactive investors that is in TV and Dr. Terrell will be giving some information on the new Volition America and his vision for how we rollout the product in U.S. And of course just a last reminder, we’re ringing the closing bell on the New York Stock Exchange this Monday at 4 o’clock Eastern. And this is to highlight the product launch of NuQ tests and the attraction we’re getting in Europe and also the pivoting back to the U.S. in the forming of Volition America. So I believe it’s broadcast on a few channels here, if you want to watch us. It’s a very good event for us and something we’re all very much looking forward to. So, thank you and goodbye.

This concludes today’s teleconference. You may disconnect your lines at this time. Thank you for your participation and have a wonderful day.